Cranes return to Johannesburg’s skyline as hopes of recovery stir

Above the roar of earthmoving machinery, Kgotso Chilamba watched as excavators and bulldozers clawed through the red soil, clearing the ground for sleek new office towers in Johannesburg’s upscale Rosebank district.

A huge crane that swung overhead is just one of many springing up across the Johannesburg skyline — and a tentative sign that an economy that has been more or less prostrate for a decade might finally be stirring.

“Before this I was just doing piece jobs for my uncle,” said the 21-year-old general construction worker, who was previously among the one in three unemployed in the country. “It’s hard to find jobs in this country, so I’m just happy to have work now.”

For the past decade, Africa’s largest economy has on average expanded by less than 1 per cent annually, barely above the population growth rate. It has been hobbled by power blackouts, rampant corruption and logistical bottlenecks at its poorly maintained railways and badly managed ports, which have slowed both exports and investment.

Now, a crop of better news and economic data hints at the possibility of a turnaround under President Cyril Ramaphosa’s coalition, the so-called government of national unity, as structural reforms gather pace. 

Sim Tshabalala, chief executive of Standard Bank, Africa’s biggest by assets, said “green shoots” in the economy were real, from anecdotal evidence about cranes in the Johannesburg skyline to concrete data showing bank lending to the private sector picking up and a strong rise in domestic car sales.

In response to the uptick, unemployment dipped slightly in the third quarter from 33.2 per cent to 31.9 per cent with job creation particularly strong in construction. 

Construction output, one of 10 critical industries tracked by Statistics South Africa, turned positive during the same period for the first time in three quarters. All but one of the other nine sectors — utilities was the exception — also grew during the third quarter. 

Gathering improvements could translate into growth of well above 1 per cent in 2025, rising to 2 per cent by 2028, Tshabalala said, although that is well below the 4.2 per cent average growth the IMF expects across emerging market and developing economies. 

South Africa in November secured its first credit upgrade in two decades after S&P Global Ratings lifted the country’s sovereign ratings by one notch to BB. While still two notches below investment grade, S&P cited better tax revenue, a stable electricity supply and a reduced need to bail out ailing state-owned enterprises as among its reasons for greater optimism. 

In October, South Africa was also removed from the Financial Action Task Force’s “grey list”, which identifies countries with weak systems for countering money laundering. In November, for the first time in 25 years, the country’s central bank lowered its inflation target, to 3 per cent from 4.5 per cent — a move designed to revive growth by lowering price expectations.

“It’s looking as good as it has for a long time,” said Razia Khan, chief economist at Standard Chartered. “What is really changing for the South African economy is these long-held expectations of reform that never came to fruition for one reason or another are now delivering.”

Even before the coalition government was formed in 2024, Ramaphosa had begun to push through structural reforms, including opening up the crisis-ridden electricity sector to market competition.

Under an initiative known as “Operation Vulindlela” — isiZulu for “clear the path” — his government began to work with the private sector to tackle problems in power, transport, water and local government. The initiative has become more central under the government of national unity. 

As well as power shortages, Vulindlela is seeking to address a logistics crisis that has damaged the export industry, especially mining, by undermining the efficiency of ports and reducing the amount of ore, coal and other minerals businesses can send along the ageing and crime-ridden rail network.

A court in November cleared International Container Terminal Services, a Filipino operator, to start running Durban port. Transnet, the state-owned freight and logistics company, is in the process of concluding contracts with 11 private companies to run services on its tracks. 

A new management team at Transnet, which has focused on fixing broken tracks, also appears to be having an impact. The amount of freight hauled on South African railways fell from roughly 230mn tonnes in 2015 to 150mn tonnes in 2024 but Transnet is now reversing the decline. With a current rate above 160mn tonnes, the aim is to reach 170mn tonnes in 2026 and 250mn tonnes by 2030.

“As forecasts of economic growth improve — and there’s also anecdotal evidence of a better operating environment in the economy — we expect the private sector to ramp up,” said Isaac Matshego, senior economist at Nedbank, which nudged its GDP growth expectations for 2025 to 1.4 per cent.

However, economists caution that the recent signs of economic improvement are both too fragile and too weak to fully address South Africa’s deep social problems, the biggest of which is youth unemployment.

Continued business confidence depends on maintaining the stability of the government coalition, in which the African National Congress shares power with eight other parties, including, crucially, the more business-friendly Democratic Alliance.

Several economists said that if economic reforms were maintained and deepened, South Africa should be aiming at long-term growth of about 3.5 per cent, a rate at which the country has not grown in 15 years.

Elizabeth Sidiropoulos, chief executive of the South African Institute of International Affairs, said economic recovery was real but needed to be nurtured. “I think there are definitely green shoots,” she said. “The point is to make sure that, as with plants that one has in one’s garden, the green shoots are not trodden on.”

For now, many investors are optimistic. On the rooftop of a high-rise building in Johannesburg’s inner city, Anton Jaffe, commercial director of developer Olitzki Property Holdings, pointed to yellow cranes dotting the landscape.

“For about a decade, you didn’t see cranes in Johannesburg,” said Jaffe. “Now they’re back and they symbolise hope.”

Data visualisation by Janina Conboye in London